Calxeda, Pioneer in ARM Chips for Servers, Shuts Down

Calxeda officials said the company was too early to market, and that its products were not generating enough revenue to keep it afloat.

Calxeda, one of the leaders in developing ARM-based chips for low-power servers, is shutting down after a hoped-for round of funding fell through.

Officials with Calxeda, which had been working with such top-tier server OEMs as Hewlett-Packard and Dell in bringing systems-on-a-chip (SoCs) based on the ARM architecture to servers, had thought they had financing lined up that would keep the company open, according to Karl Freund, vice president of marketing.

However, the financing didn't come through and there was no time to pull together another deal, making it impossible for the 130-employee company to meet payroll and other financial obligations, and Calxeda's board decided to close down, Freund told eWEEK.

What happens from here is unclear, he said. Calxeda officials will meet with creditors to try to find the best way for the company to resolve its debts, and it could mean selling the assets to another party that would continue the businesses in a much smaller fashion, possibly as a chip maker for fabrics, said Freund, who came to Calxeda after executive positions at HP and IBM. The company's future will come into better focus within the next three to six weeks, he said.

In the meantime, most of the 130 employees will be gone, though there will be a skeleton crew kept on to help service customers, he said. In addition, the company's two products will continue to be available and will be supported by whatever entity comes out of the restructuring, according to officials. Most of the employees were based in Austin, Texas, though there were some in Sunnyvale, Calif., and in China.

Calxeda started life as Smooth-Stone, changing its name and bringing on several executives in 2010. The company is among a range of vendors that are looking to bring ARM's low-power SoC technology, which powers most smartphones and tablets, into the data center to power microservers. These power-efficient, dense systems are aimed at Web-based businesses like Google, Facebook and Amazon, which run massive data centers running huge numbers of small systems that process a lot of simple workloads.

Calxeda was among the more prominent vendors—which also includes Applied Micro and Marvell Technologies—developing ARM-based server chips. ARM officials expect to challenge Intel in the low-power server market, saying their architecture will transfer well from mobile devices to the data center. However, currently ARM's architecture is 32-bit, though the vendor is expected to launch its 64-bit ARMv8 design this year.

Systems sporting 64-bit ARM chips are expected to begin hitting the market later next year. Advanced Micro Devices plans to build ARM-based server chips in 2014, and Samsung is expected to do the same.

Calxeda's Freund said the company's problems were more internal and were not an indication of larger issues around the push to bring ARM into the data center.

"This is really about us being too early to the market," he said.

The company burned through $103 million in financing and released two 32-bit SoCs, the ECX-1000 and ECX-2000. Both SoCs also featured Calxeda's Fleet Fabric technology. Its first two 64-bit offerings, code-named "Sarita" and "Lago," were expected to be available in 2014. However, even though customers of the ECX-1000 and ECX-2000 were happy with the product, there wasn't enough business to make up for the money the company was spending, Freund said.

Patrick Moorhead, principal analyst with Moor Insights and Strategy, said he was surprised to learn about Calxeda's demise, given the strong relationships the vendor had with HP, Dell and original design manufacturers (ODMs). However, Moorhead agreed that Calxeda may have come out of the gate too early.

"Data centers didn't want too many software transitions, from X86 to 32-bit ARM to 64-bit ARM," he said in an email to eWEEK. "In the end, scale-out data centers were only open to one potential change. There is still a market desire for very dense servers and the technology that provides this, lower-power SoCs tied together by intelligent fabric. Intel has made huge advances here, but there are no less than 10 ARM-based companies focused on specialized silicon for specific workloads that are chomping at the bit to make inroads. It will be an interesting 2014 as 64-bit ARM servers make their presence."

Lakshmi Mandyam, director server systems and ecosystem for ARM, said she was hopeful that Calxeda's innovations won't be lost.

"As an innovator Calxeda successfully demonstrated the benefits of efficient ARM-based servers and we are hopeful their restructuring can preserve the technology that they developed," Mandyam said in an email to eWEEK. "Many other companies are now developing solutions around ARM spanning a range of workloads and goals, so regardless today's news doesn't change our commitment to, or outlook on the server and networking markets."

In an interview with eWEEK earlier this year, Andrew Feldman, corporate vice president and general manager of AMD's Server Business Unit, said ARM has a strong future in the data center, predicting that it will account for 20 percent of all server chip sales by 2016. Feldman also said that he expects AMD—which already makes x86-based server chips—to become the dominant ARM-based server chip maker. The company already has a history of making server chips, strong relationships with system OEMs and ODMs, and a lot of IP that it can draw on, he said. In addition, AMD has the capabilities and can spend the money needed to come out with upgraded chips every 12 to 18 months, a costly and difficult proposition for smaller companies like Calxeda and AppliedMicro.

"The CPU business is no place for small companies," Feldman said. "It's just too expensive."

Intel has been aggressively building out its low-power Atom platform to meet the growing demand for energy-efficient and dense servers. The company in September began shipping its second-generation 22-nanometer Atom C2000 "Avoton" SoCs, which are based on the new "Silvermont" microarchitecture that Intel officials said exceeds the ARM architecture in power and performance.

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